Berkshire will someday have opportunities to deploy major amounts of cash in equity – we are confident of that. But, as the song goes, “Who knows where or when?” Meanwhile, if anyone starts explaining to you what is going on in the truly-manic portions of this “enchanted” market, you might remember still another line of song: “Fools give you reasons, wise men never try.”

Back in April 2003, Warren Buffett purchased about 10% of PetroChina for US$488 million at less than HK$1.70 a share. With the present share price above HK$11, this investment has turned out into a 6-bagger.

In 1985, a major investment banking house undertook to sell Scott Fetzer, offering it widely – but with no success. Upon reading of this strikeout, I wrote Ralph Schey, then and now Scott Fetzer’s CEO, expressing an interest in buying the business. I had never met Ralph, but within a week we had a deal.

Unfortunately, Scott Fetzer’s letter of engagement with the banking firm provided it with a $2.5 million fee upon sale, even it it had nothing to do with finding the buyer. I guess the lead banker felt he should do something for the payment, so he graciously offered us a copy of the book on Scott Fetzer that his firm had prepared. With his customary tact, Charlie responded: “I’ll pay $2.5 million not to read it.”

At Berkshire, our carefully-crafted acquisition strategy is simply to wait for the phone to ring. Happily, it sometimes does so, usually because a manager who sold to us earlier has recommended to a friend that he think about following suit.

At other companies, executives may devote themselves to pursuing acquisition possibilities with investment bankers, utilizing an auction process that has become standardized. In this exercise, the bankers prepare a “book” that makes me think of Superman comics of my youth. In the Wall Street version, a formerly mild-mannered company emerges from the investment bankers’ phone booth able to leap over competitors in a single bound and with earnings moving faster than a speeding bullet. Titillated by the book’s description of the acquiree’s powers, acquisition-hungry CEOs – Lois Lanes all, beneath their cool exteriors – promptly swoon.

What’s particularly entertaining in these books is the precision with which earnings are projected for many years ahead. If you ask the author-banker, however, what his own firm will earn next month, he will go into a protective crouch and tell you that business and markets are far too uncertain for him to venture a forecast.